Ashtead gains share in tough markets

9th Mar 2010 07:02

Difficult market conditions hit revenue and profitability at equipment rental group Ashtead Group but the company’s boss took comfort from his belief that the company is ‘clearly gaining market share’.‘This outperformance, together with the preparatory actions we took a year ago to reduce costs and fleet size, has helped us to protect profitability and deliver continued strong cash generation,’ said chief executive Geoff Drabble, after the company had reported a larger third quarter loss.Loss before tax in the three months to 31/1/10 was £15.7m, compared to a loss of £9.5m a year earlier. Over the first nine months of the company’s financial year it made a profit before tax of £2.9m, versus a profit of £30m the year before.Earnings before interest, tax, depreciation and amortisation (EBITDA) in the third quarter fell to £49.9m from £70.3m in the three months to end-January 2009. EBITDA over the nine month period was down to £193.8m from £268.2m the year before.Revenue in the third quarter tumbled to £187.3m from £280.3m in the third quarter of the previous year. Nine-months revenue dived to £628.3m from £861.4m.Cash flow has been good, helping reduce debt to £828.6m at the end of January from £1,035.9m at the end of April, though a £77.9m exchange rate related gain also helped matters.With activity levels set to remain low in the construction markets the company is not expecting market conditions to improve materially but ‘a range of lead indicators support the view that we are currently at or very near the bottom of the cycle in the US,’ the company said.‘The business is delivering good margins and gaining market share, which, together with its financial strength, means that the board believes that Ashtead is increasingly well placed to benefit when markets recover,’ Drabble said.